Wolff: The end of advertising

Mar. 9, 2014
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Columnist Michael Wolff. / Todd Plitt, USA TODAY

by Michael Wolff, USA TODAY

by Michael Wolff, USA TODAY

Last week, Disney, which owns ABC, made a deal with Dish Network, the satellite provider, that, for the first time, will formally allow the use of technology to let viewers skip ads on ABC shows. The fig leaf compromise here is that Dish, which will now stream ABC shows over the Web, will have to wait three days after first broadcast before letting its ad-skipper, AutoHop, go to work. But it's a big breach in an up-to-now implacable network wall. Finally, a major network has bent to the obvious - people expect to be able to skip ads.

In this, Disney breaks with NBC and CBS and Fox, which continue to sue Dish over AutoHop. Disney, which, because of its theme parks, is significantly less dependent on ad revenue than the other networks and their parent companies, has always been the company that the others feared would break ranks and invite the deluge.

Now the inevitable happens a bit faster than it otherwise might. American media, marketers and culture move inextricably closer to a world in which video is wholly unhooked from advertising.

This creeping development has been one of the underlying themes of modern American media and cultural life. Once upon a time, all video in the home, save for public television, was ad-supported -- even most ticket-supported movies were designed for ultimate television consumption and advertising payoff. Then came the VCR, premium pay television, DVDs, piracy, DVRs, streaming. Suddenly, a sizable part of video consumption was ad free. What's more, cable, by providing a revenue stream hooked to subscriber payments, started to wean content makers and distributors, in addition to audiences, off of advertising.

Television advertising as it continues to exist - lucratively so - has often seemed like some odd form of protectionism, forcing the consumer to endure something that the simplest technology makes obsolete, and as a kind of emperor's new clothes conceit: Who beyond the comatose actually watches ads, anyway?

But, curiously, the very possibility that someone, due to happenstance, laziness or - in the case of sports or special events TV - social bonhomie, might actually see an ad, has merely raised the price of this possibility. Brands need to advertise - and have yet to figure out any way as good as television; even the illusion that they might still be able to advertise on television is worth a lot.

The dual track of advertising-supported video and ad-free video has fostered a weird creative and class division in the country. There is premium television, from The Sopranos to House of Cards, that, precisely because it is not ad-supported, has resulted in a change of form and substance that has wholly remade the very idea of television with a dramatic IQ leap. And then there are alternative ways of getting television without ads that have effectively bifurcated the American audience. You might even be able to make the argument that the people left watching ads, in an unintended form of target marketing, are so submissive that they are particularly susceptible to them.

But what happens when there is no television advertising of any kind? What happens when even the most unassertive can easily skip even network television ads?

But even in this, researchers have discovered a flaw: watching ads is a learned and habituated activity.The more you fall out of the habit of watching ads, the more they seem more dissonant and incongruous. Your mind becomes a kind of AutoHop.

There are two different business interests here in facing the transition to a video world with ever-fewer ads: the media and the brands.

The media have been slowly converting themselves into a subscription and licensing business - learning to live with lower margins. Even networks now get fees from cable companies. ABC's Dish deal undermines ad dollars, but replaces them with licensing dollars, however fewer.

Brands, on the other hand, while they been moving consumer ad dollars into other forms of marketing, ultimately face a bigger crisis than television producers.

Digital media, a hoped-for alternative, have woefully failed to become a method of brand identification. Sponsored content offers much less of a return than being a television sponsor. Nothing, so far, has replaced, or even suggests it might some day be able to replace, the powerful nexus of video, a passive audience and advertising in the creation of consumer desire and, indeed, in the character of modern man.

This has been so confounding, and existential, that it has been in the interest of all concerned - media companies, advertising agencies and corporate marketing departments - to minimize the big picture, trust in the slow pace of change (and that one will reach one's retirement first), and to focus on the incremental ways that video advertising might yet find an audience.

But we are arriving, ever-faster, at a new normal: a world, practically speaking, without advertising on television programs - in effect, the end of advertising as we know it.

A moment of appreciation, please, for one of the most dramatic and consequential cultural and business developments of our time: The sky is falling.